Case analysis on the eMBaRKinG on e-BUsiness at

DUCati MotoRCyCles

Course Name: Marketing Channels

Course Code: MKT450
Section: 2
Prepared For: Rafsan Elahi (Rfe)
Lecturer, Department of Marketing and International Business.
Prepared by
Name ID Serial No:
Md. Minhazur Rahman 1420303030 26
Nazmus Sakib 1330635030 14
Chowdhury Sifat-Ur-Rahman 1330467630 12
Md. Mahmud-AL- Hasan 1410245030 18
Fahadul Alam Fahad 1420322030 27
Fayej alhasan Pappu 1321813630

Date of Submission: May 8, 2018

 TABLE OF CONTENTS

1. What are the advantages and drawbacks for Ducati of tightening control over its distribution
network? .......................................................................................................................................... 1
1.1. Advantages for Ducati of tightening control over its distribution network ..................... 1
1.2. Drawbacks for Ducati of tightening control over its distribution network ...................... 2
2. Do you think that the Ducati decision to exclusively sell through the Internet its MH900e
motorcycle model was a risky or safe bet? ..................................................................................... 2
3. Since Italy is Ducati's main market and the Internet penetration there is one of the lowest in
Western Europe, is it advantageous or adventurous for Ducati to focus its business strategy on
electronic commerce. Defend your arguments. .............................................................................. 3
3.1. Spatial Convenience: ........................................................................................................ 4
3.2. Assortment and Variety:................................................................................................... 4
3.3. Pricing: ............................................................................................................................. 4
5. Beyond motorcycles, how should manufacturers in other industries (e.g. in consumer goods)
best leverage the Internet to capitalize on its electronic commerce capabilities?........................... 4
5.1. Quick reach: ..................................................................................................................... 5
5.2. Direct access to customers ............................................................................................... 5
5.3. Tracking of the customers: ............................................................................................... 5
5.4. Demand tracking: ............................................................................................................. 5
5.5. Bulk breaking ................................................................................................................... 5
5.6. Opportunities to innovate ................................................................................................. 5
5.7. Improve brand awareness ................................................................................................. 5
 1. What are the advantages and drawbacks for Ducati of tightening
control over its distribution network?
Ducati in the past has depended on the indirect dealers to distribute their bikes, with the exemption
being in Germany, France, Japan and the United States. Where they selected to used wholly owned
subsidiaries. The measure of control realized in those country was esteemed positive as Ducati
rebuilt their distribution strategy. Retail dealers has been phased out, as Ducati has strived to take
control of their distribution channels by means of wholly owned subsidiaries in blend with new
Ducati stores. In 2001, Ducati had effectively settled subsidiary companies in Japan, Germany,
France, Holland, and the U.K. In Italy, Ducati began rebuilding its business strategy by
transforming merchant outlets into unique Ducati retail outlets called Ducati stores and Ducati
corners. In the rest of the nations, autonomous distributors work as mediators between Ducati
Motor and retail merchants.

1.1. Advantages for Ducati of tightening control over its distribution network
omplete control over its outlet: By distributing their motorcycles in authorized Ducati
Stores, Ducati can encounter a more prominent level of control over their resource when
it is obtained by a client. This immediate control empowers Ducati to keep up consistency in
benefit arrangement. Control over hiring, preparing and motivating employees is likewise an
advantage of protective control over distribution.

Control over key markets: Ducati upgraded its control over key markets by expanding the
quantity of subsidiaries, replacing underperforming distributors and to meet expectations
appointing new wholly owned distributors to enter new markets, (for example, Bahrain, Chile,
Malta, and Thailand)

Individual relationships with customers: Artistic employees or experts create remarkable

relations with clients. Subsequently, the clients create steadfastness for the individual
representative or for Ducati itself.

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 irect feedback from customers: Ducati will be able to acquire coordinate input from
clients on their current needs. Therefore, they can likewise see how the impression of the
customers towards Ducati are evolving.

Integrating promotional activity: Skilled workers or experts incorporates the center esteem and
message of Ducati to the end user as they deal with the customer on daily basis Ducati gained
better power with respect to its brand essence.

Interactive communication: As service providers of Ducati are in consistent and direct contact
with customers, two-way communication ends up influential.

1.2. Drawbacks for Ducati of tightening control over its distribution network
Financial risks: Ducati must bear all the financial risks. While escalating, the business requires
activate all the capital for store proliferation, advertising, service quality or new administration
advancements.

Drawbacks of expanding market into other unfamiliar regions: Ducati might not have the
capacity to adjust its business organizes in new conditions. In such circumstances, individual
dealers are ideal.

ncreases Internal Workload: Assembling motorcycles in the meantime training,

remunerating frontline representatives to convey the correct message, giving information,
taking requests, dealing with defaulting clients will expand the general workload.

2. Do you think that the Ducati decision to exclusively sell through the
Internet its MH900e motorcycle model was a risky or safe bet?
I think, Ducati’s decision of selling its MH900e bike through internet was a bit risky but Ducati
was very successful in selling MH900e bike through internet. They proved that e-business is not
only for the daily consumer products but also for the premium product such as Ducati bike.

Their market survey strategy worked well that’s why they became successful. They conducted a
survey to see people are interested or not to buy the Ducati MH900e bike if it is launched. They

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got positive response from the people and introduced the produced through their website and
started selling through the website. It was the first bike that’s sold through internet.

t was risky because people usually like to buy high product from physical stores. People
cannot trust the online system for such products. So, people could easily deny buying from
online. During that time in Italy people were not that much friendlier with purchasing products,
especially high-end products from the internet.

As people had faith in the company and as it was only available on internet people had no option.
The buying process was not entirely through the website. Another reason was Ducati offered only
Euro currency for paying the price of the bike it was a problem for the customer from other
countries.

ocal dealers were involved in the buying process as the verified the credit card, sent
information to the customers and handed over the key to the customers. The process was
trustworthy. The company reduced the competition by not making the bike available in physical
stores.

Although it was risky for Ducati to sell MH900e Motorcycle through internet, but they were
successful.

3. Since Italy is Ducati's main market and the Internet penetration

there is one of the lowest in Western Europe, is it advantageous or
adventurous for Ducati to focus its business strategy on electronic
commerce. Defend your arguments.

rom our point of view, we think that it is advantageous for Ducati to focus its business
strategy on electronic commerce. From the case we have learned how online platform has
affected Ducati's MH900e's sales. We'd like to show a few points which will support our argument.

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 3.1. Spatial Convenience:
The main advantage of going for electronic channel rather than the traditional retailing is that the
consumer gets the easiest access to its online stores through internet. Before, it was hard for Ducati
to place its retail outlet all over Italy. But online platform will give Ducati an edge to connect with
the consumers from anywhere at any time. This will also reveal a new scope for Ducati to reach
bigger consumer and potential consumer groups who are interested to buy Ducati bikes.

3.2. Assortment and Variety:

Now Ducati can keep a far more assortment and variety in its product catalog as there are no extra
space cost. Ducati can now provide more of its bikes under different category like scooter market,
off-road market, road market. As the product will be displayed through catalog, consumers can
now have clear idea on their desired product by looking up in its specs.

3.3. Pricing:
onsumers nowadays are getting dependent more on online platform to get a discounted price.
As manufacturers don't need a retail outlet cost, they can easily provide their product in
lesser the price than their retail outlet. And Ducati isn't an exception here. As we know, Ducati
bikes are very expensive and a certain amount of discount can easily attract the consumers.

Although there are some drawbacks of going through electronic channel, like the waiting and
delivery time is higher, conflict might raise with existing retailers, can be overshadowed by the
overall benefits from taking the decision.

5. Beyond motorcycles, how should manufacturers in other industries

(e.g. in consumer goods) best leverage the Internet to capitalize on
its electronic commerce capabilities?
anufacturing industries that are focusing on consumer goods has the highest potential
from adopting electronic channel. The best ways to leverage the internet for
manufacturers are as follows,

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 5.1. Quick reach:
Internet is the fastest way to reach people from different parts of the world in modern era.
Manufacturers can use this tool to reach the mass population to gain a bigger market coverage for
a very little cost.

5.2. Direct access to customers

Through internet, manufacturers can have direct interaction with the consumers though social
platform, e-mail or website chat box. Through this facility, manufacturers can have very fast
feedback of their customers to serve better in the future. Manufacturers can also offer customized
product for their consumers.

5.3. Tracking of the customers:

Manufacturers can track of their customers and can maintain a customer database which will
contain each customer taste and preference. So, that it’s easy to meet customer needs.

5.4. Demand tracking:

Manufacturers can also track the demand of a product to ensure that they have enough time to
manufacture the goods before the inventory is out of stock.

5.5. Bulk breaking

Manufacturers can break the bulk to sell to the individual consumers to satisfy many small
consumers.

5.6. Opportunities to innovate

As manufactures has the data of customers choice and the trend their customers are following, they
can easily innovate a new product and penetrate the new product through online platform.

5.7. Improve brand awareness

Manufacturers can improve brand awareness through aggressive marketing, best customer support,
and with the quality of service output to build a loyal customer base faster than before.

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